Embrace Data to Accelerate Sustainability
The Business Case for Sustainability is Compelling
Sustainability is becoming a critical differentiator and strategic priority in the financial services sector. According to a 2024 survey of 248 financial services executives across 12 markets, 67% acknowledge that the benefits of sustainability initiatives outweigh the costs. Additionally, 64% view sustainability adoption at scale as equally important as digital transformation, emphasizing its strategic significance.
However, despite recognizing the business case, only 25% of executives plan to significantly increase their ESG investments in the near term. This gap between recognition and action is evident, and customer sentiment reflects this disconnect, with many stating that corporations are not doing enough to address climate change.
Poor Reporting and Data Challenges Obscure Sustainability Efforts
Challenges in sustainability reporting and data management are significant. Only half of financial services organizations publicly report their social sustainability initiatives, leading to a lack of transparency and trust. Globally, 52% of consumers believe companies are involved in greenwashing, with financial services being the second most affected sector in the EU in 2023.
Data management remains a critical issue. A 2022 survey found that 58% of financial services organizations have not automated their emissions data collection process, and only 11% have invested in data cockpits or control towers for ESG insights. The regulatory landscape is intensifying with directives like the EU’s Corporate Sustainability Reporting Directive (CSRD) and the SEC’s Climate-Related Disclosure in the United States, mandating more comprehensive and transparent reporting.
Integrate ESG Data for Enhanced Transparency
Financial services organizations need a strategic approach to sustainability reporting that addresses obstacles and capitalizes on opportunities. This involves building scalable and automated reporting processes from the start, centralizing data management, and integrating these features early. By doing so, firms can improve their enterprise value and long-term reporting efficiency.
Accelerators such as data hubs support this approach, enabling financial services organizations to achieve end-to-end compliance, agile and auditable reporting, and improved business decision-making. Success depends on a strong ESG data governance framework integrated into the core business model, including ESG taxonomy, new technologies, stakeholder engagement, and streamlined data collection.
The Vision/Action Gap in Sustainability Execution
Financial organizations increasingly recognize the critical role of sustainability in future-proofing their operations. According to the survey, 76% of top leadership in financial services share a common vision that the business needs to change to become sustainable. This awareness has led to the formation of global and regional alliances committed to ambitious net-zero targets.
For instance, key banking players such as Bank of America, La Banque Postale, BBVA, Citi, First Abu Dhabi Bank, Lloyds, and Nordea committed to net-zero emissions and low-carbon investments through the United Nations-convened Net-Zero Banking Alliance (NZBA). Founded in April 2021, NZBA updated its guidelines in Q1 2024, requiring members to disclose more about their climate targets, including plans to cut emissions from capital markets activities.
These commitments highlight the growing commitment to sustainability and the need for robust data and reporting frameworks to ensure compliance and transparency.
